How to price a product or service?

I often find that my digital marketing students overlook that pricing It is one of the marketing variables that most influences sales of a product, and are unable to properly fix the price of a service or a product. Let's see How to price a product or service?

This article aims to help establish the correct price of any product or service.

  1. Pricing by cost + margin. That is, calculate what it costs to provide a service or what it cost to create a product and add the margin necessary to achieve the expected return. This is the only way to fix the prices my students occurs, and not bad! But it can not be the only one. We must weigh other variables.
  2. Pricing as competition. The prices of our competitors should be considered as a reference and we must fix our depending on whether we want to position ourselves above, or below. This variable depends not only on the profitability of the project but also has a strong effect on our brand image.
  3. Pricing depending on how much demand endures. This form of pricing always amazes students and instead is one of the most commonly used, especially for services. It is to set a price based on the parameters 1 and 2, and plunge up regularly to see if orders keep coming. By the time we notice that slow, we have probably reached the "fair" price received by our customers.
  4. Pricing according to the life cycle of a product. A product or service should not have the same price when it is born and we want people to know that in full operation, or when it is uncatalogs and publish it in our "bargain list".

We should consider these four variables every time you set a price.

There is a fifth variable which is a bit dangerous but it may make sense in certain cases:

  • Pricing according to the distribution channel. That is, for some customers have a price and another price for others, depending on the distribution channel for arriving and type of customer. This fifth variable is useful when you are already well established and well handle a pricing strategy. I do not recommend to start a business or making a business plan ... better focus on the previous 4.

Well, I hope this information has been helpful and that from now know how to price a product or a service, and when you have to make business plans, you calculate either prices or at least make a little more rigor.

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How much is my site? - Discover the 5 variables that give value to your website

Surely you've ever wondered what it's worth doing the work you are creating content for your website and struggling to attract traffic and customers.

This article aims to analyze the 5 variables that affect the value of a web, and at the same time, show you tools that can be helpful to quantify these variables.

What variables affect the value of a website?

Variables that affect the value of a site: the domain name, users of your website, market segments to which users belong, your database, your audience on social networks.

How much is a domain name?

A new domain

The market price of a new domain is between 5 € and 15 € a rule. It all depends on the domain extension you use (.com, .es, .cat, etc.). This year we have put on sale a lot of new extensions and each extension manager decides the price of the domain extension.

Search for a domain here CDmon.com the price for that domain with different extensions, if new.

Domains with words of great value

There are numerous markets where you can buy domains containing words of great value. If also the domain and the extension becomes a meaningful sentence, the value is even higher (in English call "domain hacks"). For example: www.aero.taxi is for sale at Sedo for $ 699.

Some of the major trading markets domains are:

Here you will find a tool that will search "domain hacks" related to what you want: Domain Hack

A domain with history

Typically your site already has a history, if your reputation is good, this is also payable.

To see the history of the domain, you can access: Archive.org

To know the reputation of a domain, look at: Majestic SEO

A domain with history and good reputation is worth at least 1,000 euros.

The value of your domain depend on the years you have and the Trustflow and Citationflow assign you Majestic.com

How users a website worth?

Visits to a website can make them profitable advertising and affiliate programs. To find the value of the advertising potential of your website calculates the following:

1) Number of visits. For example 100,000 visits per month.

2) Page views per user. For example 4 pages per visit (see your Google Analytics).

3) Monthly Pageviews. Current will tell you the your Google Analytics, but if what you want is to make a prediction, then multiplied visits you think you have, the pages visited per user.

With Adsense you can win 20 € per 100,000 page views (nothing fancy ... but that's how things)

With affiliate programs you'll find the Zanox (www.zanox.es), with 100,000 visits you can check about 750 € (calculated with conversion rate of 3%, 4 page views per user, and collection of 1 € per contact achieved).

So more or less, with a page of 25,000 users, generating 100,000 page views per month, you can check 770 €, per year this will be 9,240 €. The value of this type of website as this variable is calculated by multiplying 3 its annual turnover, so the page value would be: 27,720 €

Prueba la calculadora que hemos creado desde Quadrant Alfa: Value Request web

The market segment they belong

Si tus usuarios pertenecen a un segmento de mercado que es apreciado por los anunciantes. Por ejemplo, mujeres entre 25 y 45 años interesadas en la cosmética. Entonces el precio la publicidad puede aumentar drásticamente pudiendo llegar a 20€ cada 1000 páginas vistas. Si son muy jóvenes, valdrán menos… y además como utilizan Adblock es más difícil hacerles ver publicidad.

How much is a database?

Los datos de contacto de un grupo de usuarios se pagan entre 0,45€ y 0,60€ por registro, es decir, por nombre, apellidos, email, como mínimo. Súmale 0,7€ por cada criterio de segmentación que puedas ofrecer (edad, ciudad, idioma, IP, etc.). Si consigues sacarle provecho cada mes, multiplica el valor por 12 y luego, como en el caso de la facturación por publicidad, multiplica el resultado por 3 años (la teoría es que el comprador, sin hacer nada, debería poder sacarle el mismo rendimiento que tú, los próximos 3 años).

Remember that the Data Protection Act prohibits you from selling data from your users, so this is the value if signing over the company and the data were valued as assets. You have to monetize with advertising or sponsored messages.

How much does the audience on social networks?

This is easy to calculate because you can know if you approach it from the point of view of how much it costs you to advertise on social networks and get more followers.

Twitter and Facebook, a follower cost about 1 €. So if you have 1,000 followers, your network has a value of 1,000 €. Again, segmentation or a special public can make up this price.

Con todos estos datos, puedes calcular más o menos el valor de tu sitio web. O puedes probar la calculadora que hemos creado para la ocasión: Value Request web

Make your calculations and see the result.

Although entrepreneurial advice and eBusiness specialist teacher.

  1. A website is worth what you are willing to sell to you charge for. You have to start thinking: if I pay 1,000 € I sell it? No. If I pay € 10,000 I sell it? Maybe. If I pay 100,000 me sell it? Yes. Well wing, you have a price range. Refines and find the value you give to your website.
  2. A web worth what someone is willing to pay for it. The willingness to buy from people and businesses is not always rational. So although calculated as we have done in this article value is one, someone may be willing to pay more for it. Or less ... given the case.

The final value of your website which will consider 3 things: the asset value, the value you give it, and the value that gives a prospective buyer. I hope this article has been helpful.

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Montse.